Lawsuit Seeks to Address Disparities in Sandy-Relief Funding for Poor

sandy streetA housing advocacy group yesterday filed a lawsuit seeking to force New Jersey to provide information about three of its largest housing-grant programs, which are expected to provide $850 million in assistance to residents affected by superstorm Sandy. At least two of the programs must provide a majority of funds to low- and moderate-income individuals and families.

The information sought by the lawsuit may help explain why five communities in Bergen and Hudson counties rejected low- and moderate-income residents for construction grants of up to $150,000 at rates much higher than the state average. Meanwhile, applicants with higher incomes were approved — also at rates greater than average.

Fair Share Housing Center officials are concerned about why some homeowners have been denied aid both from the Reconstruction, Rehabilitation, Elevation and Mitigation Program and from the Resettlement Program. They have similar concerns as to why landlords were rejected by the Fund for Rehabilitation of Small Rental Properties.

Money for these three programs makes up 46 percent of the federal Community Development Block Grant-Disaster Recovery funds from the federal Sandy aid package, according to the Cherry Hill-based center.

“RREM is certainly the biggest program. It has specific targets for low- and moderate-income homeowners. We want to make sure they are being met,” said Kevin Walsh, the center’s associate director. “We have an overall interest in seeing that the state is using the money wisely.”

Adam Gordon, an attorney at the center, said there is concern over the percentage of grants going to those with low and moderate incomes, both statewide and in certain parts of the state.

The number of grant applications and approvals for two key state grant programs counted by whether the applicant is of low or moderate income. Fair Share Housing Center’s suit seeks information about these and a third program.

New Jersey is supposed to be giving 60 percent of the resettlement grants to poorer homeowners, but data the state Department of Community Affairs provided to NJ Spotlight on July 31 shows that just 41 percent of those grants, worth $10,000 each, went to those with low and moderate incomes.

It is unclear whether that information is complete. According to its website, DCA stopped taking applications for the Resettlement Program as of August 1.

In its lawsuit filed in Mercer County Superior Court, Fair Share contends it has been unable to get information explaining the policies the state has been using in awarding the grants.

Fair Share filed an Open Public Records Act request with the DCA on July 31 seeking all documents pertaining to the administration of the three grant programs, including those involving determination of eligibility. According to the center, the state first asked for an extension until last Thursday and now has asked for another until September 20. Fair Share’s complaint seeks immediate disclosure.

“One of the biggest complaints we have heard from folks who are applying for the funding and are denied is that they are often mystified as to why,” Walsh said. “It’s like going to court and suing someone and being told you lost and can appeal but not being told why you lost.”

FSHC wants to be able to review the particulars surrounding the selection process to understand why thousands of New Jerseyans were denied assistance.

Tammori Petty, a spokeswoman for DCA, declined to comment on the suit.

According to the July 31 DCA data, about 4,400 people did not receive the $10,000 resettlement grants they applied for. That represents almost 30 percent of all applicants. The program was supposed to provide about $180 million. According to the DCA data, more than $110 million has been given to about 11,000 people in 283 communities.

Less than a third of nearly 13,000 applicants received approval for RREM grants. A maximum of $150,000 per homeowner is available through that program. The state had earmarked $600 million for this program. As of July 31, when the DCA provided the data, a DCA spokeswoman said the department did not yet have a breakdown of how much would be provided per homeowner.

DCA spokeswoman Lisa Ryan said at the time that an individual’s award determination “requires both a comprehensive site inspection of an applicant’s property and an award calculation that takes into account a detailed cost estimate of a project and how much an applicant has already received from private insurance and in assistance from FEMA (Federal Emergency Management Agency) and SBA (Small Business Administration) to ensure there is no duplication of benefits.”

Fair Share is one of New Jersey’s leading advocates for housing for the poor, but Walsh said the grant denials are affecting homeowners of all incomes. Poorer home owners may be more adversely affected, though, as they are typically less able to afford home repairs and resettlement costs, he added.

An analysis of the DCA data shows that about 25 percent of those with low and moderate incomes were refused a resettlement grant, as were 31 percent of those with higher incomes.

There is a greater difference between groups for the RREM grants: about 47 percent of low-income applicants were rejected, while 85 percent of those with higher incomes were not approved for these larger grants.

The state is supposed to ensure that 70 percent of the RREM grants go to those with low or moderate incomes. The July 31 DCA data, which may not be complete, shows that New Jersey is on target: 68.7 percent of all approved applicants qualified as low or moderate income.

Money from the RREM program is to be used to repair, rebuild or elevate a homeowner’s primary residence in an affected community, according to the ReNew Jersey Stronger website. A $10,000 resettlement grant can be used for any non-construction purpose to help a homeowner remain in or return to the county in which he or she lived before Sandy hit. The grant is available to those in who live in one of the nine counties where Sandy did the most damage: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union.

In its suit, Fair Share argues that it is critical to get specific information about the awarding of the grants immediately to help those who need help in rebuilding their homes and their lives post-Sandy.

“Families and organizations repeatedly ask FSHC basic questions such as under what circumstances manufactured homes can qualify for these grants, what criteria the state is using for the term ‘substantial damage’ which may be a required showing to receive some of these grants, and under what circumstances families should file an appeal of grant denials and how that process works,” according to the lawsuit. “FSHC cannot assist people who have been denied assistance effectively without understanding the policies upon which denials are based.”

It is also important, the suit states, because the U.S. Department of Housing and Urban Development is expected to award another $2 billion in funds soon and the center “cannot meaningfully participate in . . . a public process to evaluate how these funds should be used to supplement existing programs or start new programs” without knowing how the existing programs operate.

Fair Share is also seeking specific information, including race, ethnicity, age, disability, and type of income, for applicants, grantees, and those rejected for the three programs. That would be more specific than the data DCA provided to NJ Spotlight.

Nevertheless, Gordon found that data troubling, because he said it shows disparities among towns and areas in how the grants are being provided.

Of the 44 communities with at least 50 applications for the RREM program, typically at least half the low- and moderate-income applicants were approved. The lowest approval rates were in Jersey City, 14.7 percent; Bayonne, 20 percent; and Hoboken, 29.6 percent. Moonachie’s approval rate of 35.6 percent was fifth lowest and Little Ferry’s rate of 40.7 percent was 10th lowest.

Similarly, less than 14 percent of those with higher incomes received approval for RREM grants in those 44 communities. But approval rates were substantially higher in Bergen and Hudson: 42.1 percent in Bayonne, second highest; 34.2 percent in Little Ferry; 31.8 percent in Moonachie; 30.3 percent in Jersey City; and 22.2 percent in Hoboken, ranking them fourth- through seventh-highest in the state.

Gordon said those results lead to a number of questions that he can’t answer: “Were applications processed differently in Bergen and Hudson Counties than in the rest of the state? Given that these are heavily Latino areas, might there have been language barriers for the low- and moderate-income population that led to lower rates of approval, which is not permissible under federal law? And why were higher-income households approved at higher rates in Bergen and Hudson Counties than everywhere else?”